(Adds analyst quotes, updates prices)
* Canadian dollar ended at C$1.2727, or 78.57 U.S. cents
* Bond prices lower across maturity curve
By Fergal Smith
TORONTO, April 21 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Thursday, pressured by a
pullback in oil prices and position squaring ahead of key
domestic data.
Canada's currency has strengthened 15 percent since falling
to a 12-year low in January, helped by the recent rebound in oil
prices and the unraveling of expectations for a Bank of Canada
interest rate cut. It made a nine-month high on
Wednesday at C$1.2593.
People are closing out positions before retail sales and
inflation data on Friday, said Darren Richardson, senior
corporate dealer at CanadianForex. "Just taking profit on this
recent loonie strength."
U.S. crude prices settled at $43.18 a barrel, down
2.26 percent, after producers from Russia to Saudi Arabia and
Iran to Libya hinted at more output amid growing U.S. crude
stockpiles.
The Canadian dollar closed at C$1.2727 to the
greenback, or 78.57 U.S. cents, weaker than Wednesday's close of
C$1.2650, or 79.05 U.S. cents.
The currency's strongest level of the session was C$1.2628,
while its weakest was C$1.2750.
There is plenty of room for the loonie to correct further if
inflation data is weaker than expected or if oil pullbacks more,
said Richardson.
On Wednesday, Bank of Canada Governor Stephen Poloz said it
could take Canada more than three years to recover from the
shock of low oil prices, citing persistently negative factors in
its resource-rich economy.
Canadian government bond prices were lower across the
maturity curve, with the two-year price down 1.5
Canadian cents to yield 0.635 percent and the new benchmark
10-year falling 26 Canadian cents to yield 1.458
percent.
The Canada-U.S. 10-year spread was 1.4 basis points less
negative at -40.7 basis points, its narrowest gap since Jan. 29
last year.
(Reporting by Fergal Smith; Editing by Paul Simao)